Russian farmers and steelmakers compete for rail capacity amid export challenges

Russian agricultural producers and steelmakers are competing for rail and port capacity as exports are being redirected from the Azov-Black Sea basin to ports in the Baltic Sea region and the Arctic. Russian Railways (RZD) is prioritizing grain shipments, leaving steel producers facing refusals to approve applications for freight transportation.

On October 13, the Russian Steel Association, which represents major ferrous metal producers, sent a letter to Russian Deputy Transport Minister Alexey Shilo, complaining about restrictions on rail shipments to northwestern ports. Steelmakers say RZD is refusing to approve applications due to slow cargo handling at ports and a shortage of locomotives and locomotive crews.

According to the association, shipments of steel products through Russia’s southern ports fell by 21% year on year in January–August, from 7 mln tonnes to 6 mln tonnes. The decline reached 54% in July–August, prompting producers to seek alternative export routes more actively.

Meanwhile, transportation through northwestern ports is 20–30% more expensive, while shipping slabs costs an additional $30 per tonne. Slow cargo handling at ports also makes it difficult to assemble full vessel shipments. Some companies have already redirected cargo to Murmansk, where pig iron transshipment resumed for the first time since 1996.

Russian Economic Development Minister Maxim Reshetnikov also confirmed that steelmakers are facing restrictions because grain shipments are being given priority. Competition between the agricultural and steel industries for limited rail infrastructure and port capacity is intensifying. Steelmakers warn that continuous-production facilities could be forced to shut down if the transportation bottlenecks are not resolved.

Tags: export, grain, ports, rail transportation, Russia